EA2. Rene is working with the operations manager to determine what the standard labor cost is for a spice chest. He has watched the process from start to finish and taken detailed notes on what each employee does. The first employee selects and mills the wood, so it is smooth on all four sides. This takes the employee 1 hour for each chest. The next employee takes the wood and cuts it to the proper size. This takes 30 minutes. The next employee assembles and sands the chest. Assembly takes 2 hours. The chest then goes to the finishing department. It takes 1.5 hours to finish the chest. All employees are cross-trained so they are all paid the same amount per hour, $17.50. A. What are the standard hours per chest? B. What is the standard cost per chest for labor?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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EA2. Rene is working with the operations manager to determine what
the standard labor cost is for a spice chest. He has watched the process
from start to finish and taken detailed notes on what each employee
does. The first employee selects and mills the wood, so it is smooth on
all four sides. This takes the employee 1 hour for each chest. The next
employee takes the wood and cuts it to the proper size. This takes 30
minutes. The next employee assembles and sands the chest. Assembly
takes 2 hours. The chest then goes to the finishing department. It takes
1.5 hours to finish the chest. All employees are cross-trained so they
are all paid the same amount per hour, $17.50.
A. What are the standard hours per chest?
B. What is the standard cost per chest for labor?
Transcribed Image Text:Sample Exercise opens EA2. Rene is working with the operations manager to determine what the standard labor cost is for a spice chest. He has watched the process from start to finish and taken detailed notes on what each employee does. The first employee selects and mills the wood, so it is smooth on all four sides. This takes the employee 1 hour for each chest. The next employee takes the wood and cuts it to the proper size. This takes 30 minutes. The next employee assembles and sands the chest. Assembly takes 2 hours. The chest then goes to the finishing department. It takes 1.5 hours to finish the chest. All employees are cross-trained so they are all paid the same amount per hour, $17.50. A. What are the standard hours per chest? B. What is the standard cost per chest for labor?
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